AI

- C3.ai recently drew heightened attention after reporting a smaller quarterly loss and earnings that exceeded consensus expectations, even as it continued to post losses and contend with revenue pressures. - This combination of reduced losses, better‑than‑expected results, and steady earnings estimates has shifted investor focus toward the company's potential to improve financial performance over time. - Next, we'll examine how this earnings improvement and stronger sentiment among investors influence C3.ai's broader investment narrative and risk profile. Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 32 best rare earth metal stocks of the very few that mine this essential strategic resource. C3.ai is a stock for investors who believe its enterprise AI platform can ultimately turn today's losses into a more sustainable business. The recent, smaller expected quarterly loss and earnings beat support the idea that execution might be tightening, but do little to change the near term catalyst: proving that revenue pressure can ease without further eroding margins. The biggest risk remains that weak top line trends and persistent losses keep outweighing signs of incremental financial progress. Against this backdrop, the company's updated guidance for fiscal 2027, calling for US$210 million to US$240 million in revenue alongside a continued non GAAP operating loss, is especially relevant. It underlines how far C3.ai still has to go to align investor enthusiasm for AI with its actual financial profile, and it frames the recent earnings surprise as only an early, tentative step in a longer effort to stabilize growth and narrow losses. Yet beneath the improving loss picture, investors should be aware that... Read the full narrative on C3.ai (it's free!) C3.ai's narrative projects $269.8 million revenue and $32.7 million earnings by 2029. Uncover how C3.ai's forecasts yield a $8.82 fair value, a 24% downside to its current price. Some of the lowest ranked analysts were assuming C3.ai would reach only about US$253.7 million in revenue by 2029 and still struggle with profitability, so this earnings beat could either soften that very cautious view or reinforce concerns that expectations remain ahead of delivery, depending on how you interpret the latest numbers. Explore 5 other fair value estimates on C3.ai - why the stock might be worth as much as $12.00! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. - A great starting point for your C3.ai research is our analysis highlighting 2 important warning signs that could impact your investment decision. - Our free C3.ai research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate C3.ai's overall financial health at a glance. The market won't wait. These fast-moving stocks are hot now. Grab the list before they run: - This technology could replace computers: discover 25 stocks that are working to make quantum computing a reality. - We've uncovered the 7 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. - Outshine the giants: these 19 early-stage AI stocks could fund your retirement. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

On September 2, C3.ai (NYSE:AI) reported its first quarter of fiscal 2027, and the numbers finally matched the promises. Total revenue reached $52.4 million, subscription revenue made up 94% of that at $49.2 million, and total bookings jumped 73% quarter over quarter. Chief Executive Officer Tom Siebel, three months back in the role, said the company had "restored fundamental management discipline" after a stretch he described as underperformance despite every structural advantage. The quarter's results are the first real evidence that his turnaround plan is taking hold. Federal bookings grew 138% year over year, with Siebel pointing to demand from intelligence and defense customers as the Department of Defense budget is expected to climb from $1 trillion to $1.5 trillion. The company closed 22 enterprise agreements in the quarter, including deals with Ford Motor Company, Johnson & Johnson, Heidelberg Materials, Seaspan, and Holcim, alongside federal wins with the Defense Logistics Agency and the US Department of Agriculture. The cost side moved just as fast. C3.ai cut headcount by 40% across the business and consolidated vendors, generating roughly $135 million in annualized savings. That helped non-GAAP gross margin jump from 37% the prior quarter to 50%, non-GAAP expenses fall by almost $40 million year over year to $88.5 million, and free cash flow turn positive at $2.1 million, compared with a $34.3 million outflow in the same period last year. Forrester Research also ranked the C3 Agentic AI Platform first in categories including data modeling, agent development, and governance controls, ahead of Palantir, Google, and Databricks. Siebel is betting that the company's newest product, C3 Code, which builds enterprise applications from natural language prompts without manual coding, will become the next growth engine. The improvement has limits. CFO Hitesh Lath told investors that non-GAAP gross margin is expected to slide back to the mid-40s next quarter as the company makes "selective investments in a forward-deployed engineering organization," meaning the margin gain wasn't fully locked in. C3.ai is also still deeply unprofitable. The quarter's GAAP net loss came to $92.8 million, or $0.60 per share, and the non-GAAP net loss was $30.7 million, or $0.20 per share. Guidance shows losses continuing for a while yet. Second-quarter revenue is projected at $51 million to $55 million against a non-GAAP operating loss of $34.5 million to $42.5 million, and the full fiscal 2027 outlook calls for revenue of $210 million to $240 million alongside a non-GAAP operating loss of $123 million to $155 million. That is a lot of red ink for a company generating barely $52 million a quarter. And the turnaround itself is young. Siebel has held the CEO seat again for just three months, and a 40% headcount reduction is the kind of disruption that can take multiple quarters to fully absorb, even when the cost savings show up quickly on paper. Hedge fund ownership of C3.ai rose from 25 funds to 29 in the most recent quarter, a modest sign of accumulating institutional interest. Short interest tells a different story, with 31.49% of the float sold short, a level that points to heavy organized skepticism. That combination captures the tension the turnaround has yet to resolve. If the federal and enterprise momentum keeps building, that crowded short position could squeeze quickly. If it stalls instead, the skeptics already have the numbers to back them up. C3.ai's first quarter gives the turnaround real numbers to point to, from the federal bookings surge to a swing into positive free cash flow. Management itself flagged that the margin gain won't fully hold next quarter, and the loss guidance for the rest of fiscal 2027 shows profitability remains distant. Continued strength in federal demand and wider adoption of C3 Code would extend the case Siebel is building. A single clean quarter following a 40% headcount cut isn't yet proof the new discipline holds up over time. While we acknowledge the potential of AI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In. Disclosure: None. Follow Insider Monkey on Google News.

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at data infrastructure stocks, starting with C3.ai (NYSE:AI). Generating insights from system level data is an increasing priority for most businesses, but to do so requires connecting and analyzing piles of data stored and siloed in separate databases. This is the demand driver for cloud based data infrastructure software providers, who can more readily integrate, distribute and process information vs. legacy on-premise software providers. The 4 data infrastructure stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.5% while next quarter’s revenue guidance was 2.3% below. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.1% since the latest earnings results. Named after the three Cs of its original focus—carbon, cloud computing, and customer relationship management—C3.ai (NYSE:AI) provides enterprise AI software that helps organizations develop, deploy, and operate large-scale artificial intelligence applications across various industries. C3.ai reported revenues of $52.38 million, down 25.5% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ adjusted operating income estimates. C3.ai delivered the weakest performance against analyst estimates, weakest guidance update, and slowest revenue growth in the group. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $10.51. Is now the time to buy C3.ai? Access our full analysis of the earnings results here, it’s free. Starting as a database company in 1977 and now powering mission-critical systems across the globe, Oracle (NYSE:ORCL) provides enterprise software and hardware products and services that help businesses manage their information technology needs. Oracle reported revenues of $19.18 billion, up 20.6% year on year, in line with analysts’ expectations. The business had a strong quarter with an impressive beat of analysts’ billings estimates and full-year guidance of accelerating revenue growth. Oracle delivered the fastest revenue growth and highest full-year guidance raise among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 18.7% since reporting. It currently trades at $163.67. Is now the time to buy Oracle? Access our full analysis of the earnings results here, it’s free. Pioneering data warehousing technology in the 1980s before "big data" was a common term, Teradata (NYSE:TDC) provides cloud-based data analytics and AI platforms that help large enterprises integrate, analyze, and leverage their data across multiple environments. Teradata reported revenues of $410 million, flat year on year, exceeding analysts’ expectations by 3.5%. Still, it was a slower quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly and EPS guidance for next quarter missing analysts’ expectations significantly. As expected, the stock is down 19.3% since the results and currently trades at $27.77. Read our full analysis of Teradata’s results here. Built on the powerful open-source Elasticsearch technology that powers search functionality for thousands of websites worldwide, Elastic (NYSE:ESTC) provides a search and AI platform that helps organizations find insights from their data, monitor applications, and protect against security threats. Elastic reported revenues of $478.1 million, up 15.1% year on year. This result surpassed analysts’ expectations by 1.7%. Zooming out, it was a mixed quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ billings estimates. Elastic delivered the highest guidance raise of the whole group. The stock is up 5.7% since reporting and currently trades at $88.54. Read our full, actionable report on Elastic here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Image source: The Motley Fool. Wednesday, Sept. 2, 2026 at 5:00 p.m. ET Investor Relations - Amit Berry Chairman and Chief Executive Officer - Thomas Siebel Chief Financial Officer - Hitesh Lath Operator: Good day and thank you for standing by. Welcome to the C3 AI Fiscal First Quarter 2027 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. And now I'd like to hand the call over to today's host, Amit Berry. Please go ahead. Amit Berry: Good afternoon and welcome to C3 AI's earnings call for the first quarter of fiscal year 2027, which ended on July 31, 2026. My name is Amit Berry and I lead Investor Relations at C3 AI. With me on the call today are Tom Siebel, Chairman and Chief Executive Officer; and Hitesh Lath, Chief Financial Officer. After the market closed today, we issued a press release with details regarding our first quarter results, which can be accessed through the Investor Relations section on our website at ir.c3.ai. This call is being webcast, and a replay will be available on our IR website following the conclusion of the call. During today's call, we will make statements related to our business that may be considered forward-looking under federal securities laws. These statements reflect our views only as of today and should not be considered representative of our views as of any subsequent date. We disclaim any obligation to update forward-looking statements or outlook. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a further discussion of the material risks and other important factors that could affect our actual results, please refer to our filings with the SEC. All figures will be discussed on a non-GAAP basis unless otherwise noted. Also, during today's call, we will refer to certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures, to the extent reasonably available, is included in our press release. Finally, at times in our prepared remarks, in response to your questions, we may discuss metrics that are incremental to our usual presentation to give greater insight into the dynamics of our business or our quarterly results. Please be advised that we may or may not continue to provide this additional detail in the future. And with that, let me turn the call over to Tom. Thomas Siebel: Good afternoon, everyone, and thank you for joining us. Three months ago, I returned as Chief Executive Officer with a mandate to turn this company around. I returned as CEO because the company was candidly underperforming despite every advantage. The product offerings are exceptional. The market is huge and rapidly growing, and the balance sheet is rock solid. None of that was the problem. The problem was execution. And 1 quarter into the turnaround, I believe the company is on track. In the past 3 months, we have restored fundamental management discipline to this business. We completely restructured the company. We restructured sales. We restructured products. We restructured services. We reset the cost structure, driving massive costs out of the business and implemented rigorous cost controls. We reinstated the fundamental management practices necessary to run a serious business: clear ownership, hard deadlines, weekly reviews. We rebuilt the selling motion around disciplined account management and pipeline development rather than heroics. We now have experienced executives in charge of every aspect of the business in sales, in products, in services, in finance and legal. This is the leadership team that will execute the turnaround. We refocused the product offerings on our Agentic AI stack, our greatest technical strength, and the largest and most rapidly growing segment of the market. And this quarter showed meaningful progress. Revenue came in above our guidance, bookings grew at 73%, and we took real costs out of the business to narrow our operating loss and generate free cash flow in the quarter. We closed 22 enterprise agreements in the quarter, including with Heidelberg Materials, Johnson & Johnson, Ford Motor Company, Seaspan, Holcim, the Department of War, the Defense Logistics Agency, and the U.S. Department of Agriculture. Federal business was particularly strong, with federal bookings growing 138% year over year. These results are early evidence that the turnaround is taking hold. The C3 Agentic AI platform remains the starting point of every sales engagement. It reflects over 15 years of software development in which we invested in excess of $3 billion. Last month, Forrester Research released a very significant study in which they evaluated the strengths of all the AI platform providers. And in that evaluation, they ranked C3 AI at the top of the stack. Forrester ranked the C3 AI platform #1 in data modeling, #1 in agent development, #1 in application development tools, #1 in cohesive experience, #1 in governance controls, #1 in platform management, #1 in security certification, and #1 in supporting services and offerings. The other companies evaluated in the study include a who's who in software, Palantir, Google, Databricks, and 11 others. So this study is a pretty significant benchmark and really a hallmark of the technology achievement of C3 AI in the marketplace over the last 15 years. Our primary offerings today include the C3 Agentic AI Platform, C3 Generative AI, C3 AI Studio, and more importantly, C3 Code. The C3 AI Studio is our control plane for developing and operating large-scale enterprise AI applications. And C3 Code is our Agentic AI application builder that turns a natural language prompt into a working enterprise AI application in minutes to hours. C3 Code will be at the vanguard of our growth engine going forward. This product is absolutely remarkable, and I encourage you to go onto the web, take a look at it, and take it for a try. As an example of the power of C3 Code, you can take an RFP or you can take a 6-inch-thick product specification. You can provide it to C3 Code. It assembles the data, it does the data aggregation, it autonomously builds the ontology, it develops the pipeline, it builds machine learning models, it designs the user interface, and it autonomously delivers a working enterprise AI application without writing 1 line of manual code. This is really remarkable and you have to see it to believe it. C3 Code, broader platform adoption, federal systems growth, and sales discipline are at the heart of our growth engine going forward. In closing, let me be clear about where we are going. Our priorities are clear. They are measured. The turnaround is on track. We have a well-designed plan, and this is all about execution. Return the company to quarter-over-quarter consistent revenue growth. Attain free cash flow from operations. And reach non-GAAP profitability. Every objective in this company ties to those goals every day, every week, every month. We're not going to ask the market to underwrite a story. Our plan is to deliver results quarter-over-quarter and let those results speak for themselves. And with that, let me turn the call over to Hitesh Lath to talk about the specific financial results of the quarter. Hitesh Lath: Thank you, Tom. Total revenue for the quarter was $52.4 million. Subscription revenue was $49.2 million, representing 94% of total revenue. Professional services revenue was $3.2 million, of which $1.8 million was revenue from Prioritized Engineering Services, or PES. Our subscription and PES revenue combined was $50.9 million and accounted for 97% of total revenue. Non-GAAP gross profit for the quarter was $26.1 million, and non-GAAP gross margin improved sequentially from 37% last quarter to 50%, primarily due to cost reduction actions we've taken over the last few months. Next quarter, as we make selective investments in a forward-deployed engineering organization, we expect a non-GAAP gross margin to moderate to mid-40s. Non-GAAP operating loss for the quarter was $36.2 million. This was $8.3 million better than the midpoint of our guidance. Non-GAAP net loss for the quarter improved to $30.7 million and $0.20 per share. Our non-GAAP expenses for the quarter were $88.5 million. This reflects a reduction of almost $40 million as compared to the actual non-GAAP expenses of $128.1 million same quarter last year, and a reduction of over $17 million as compared to the last quarter. Free cash flow for the quarter was positive $2.1 million as compared to negative $34.3 million same quarter last year and negative $54.8 million last quarter. This was due to a significant reduction in our quarterly cash expenses as well as strong collections. We continue to be very well capitalized and close the quarter with $651.1 million in cash, cash equivalents, and marketable securities. Now a quick update on our restructuring plan. Our restructuring is almost complete, and we have been able to achieve annualized cost savings of approximately $135 million across our business. This includes cost savings from approximately 40% headcount reduction across all organizations, as well as from reduction in non-employee expenses. As we said on the last quarter's earnings call, some of the cost savings will be fully realized starting with the second half of fiscal year 2027. With a substantially improved cost structure, reorganized and focused sales, services, and products organizations, we are well positioned to achieve revenue growth, materially improve our operating efficiency and free cash flow, and position the company for long-term success. Now, I'll move on to our guidance for second quarter and fiscal year 2027. Our revenue guidance for second quarter of fiscal year 2027 is $51 million to $55 million. Our guidance for non-GAAP loss from operations for second quarter is $34.5 million to $42.5 million. Our revenue guidance for fiscal year 2027 is $210 million to $240 million. Our guidance for non-GAAP loss from operations for fiscal year 2027 is $123 million to $155 million. For the remainder of fiscal year 2027, we expect our free cash flow to broadly align with a guidance range for non-GAAP loss from operations. Now I'd like to turn the call over to the operator to begin the Q&A session. Operator: Certainly. And our first question for today comes from the line of Patrick Walravens from Citizens. Patrick Walravens: Tom, congratulations on the beginning of the turnaround here. I mean, with federal up 138%, I think I have to start with that, which is, what was sort of the biggest thing that you won? How did you win it? And what does the pipeline look like for more things like that in federal? Thomas Siebel: The pipeline in federal looks very good, and I would say there's an incumbent there that has a large market share with very high levels of dissatisfaction, both with their product and their business practices. So a lot of that dissatisfaction is spinning off now in opportunities for us. So, in addition, I mean, you know, the government's spending a lot of money on these types of technologies, particularly in the intelligence and the defense sectors. I think the defense budget's about to go from $1 billion to $1.5 billion like this month, and -- or next month, so there's -- I'm sorry, trillion, $1 trillion to $1.5 trillion. Thank you. So there are a lot of spending there, and we're getting a lot of traction. Thank you. Patrick Walravens: Great, and then as a follow-up, Tom and Hitesh, you mentioned this in your remarks too. So you're going to invest more in a forward-deployed engineering organization. What does that mean for C3? And did you have forward-deployed engineers before? And if not, what are you doing differently here? Thomas Siebel: We've always had forward-deployed engineers, I think going back to about 2014, I could be wrong by a year or 2. We've always had that function. And we need to be absolutely sure that each and every one of them are satisfied. Our customers are achieving what they need to achieve. And so we're going to increase our investment in people to help them with these deployments. And I think that investment in people is going to be offset in the medium run by this C3 Code product that you just have to see, where it's doing all of these data aggregation, pipeline building, machine learning development, user interface, without any programmers. It is way cool. So that's going to mitigate the need for forward-deployed engineers in the medium and long run. But in the short run, we're going to overinvest in existing customers to ensure they continue to realize the returns they're looking for. Patrick Walravens: All right, great, thank you. We did see it by the way, we came in and did a demo and it was remarkable, that was a surprise. Six months ago, so I'm sure it's evolved a lot since then, but it was really pretty amazing. Thank you. Operator: And our next question comes from the line of Radi Sultan from UBS. Radi Sultan: I guess maybe just to follow up on the fed opportunity, I'm curious how much of that opportunity is in sort of displacing incumbents like you mentioned versus sort of greenfield work? And then what gives you confidence that you can displace that incumbent or those incumbents successfully? Thomas Siebel: Well, we've been doing it for a while and I think it accelerated last quarter. And there's -- I think they're a fine company, they make a good product, but there's people who want to replace them and that creates an opportunity for us, I'd say. And then there's, you know, lots of greenfield opportunity where we, you know, compete with them and win. So that federal just has been and remains a really good business sector for us. Radi Sultan: Got it. And just 1 quick follow-up. If we think about the high end of the full year guide does imply a pretty steep acceleration if you hit that. And I guess, like, my question is fundamentally, like, what needs to happen, what needs to go right for you to hit that high end of the guide? And I guess, like, what gives you confidence that could happen? Thomas Siebel: You know, I'll be honest with you. I'm less interested in hitting the high end of that guide than I am making sure that we built the pipeline and we have the sales organization in place to demonstrate consistent quarter-over-quarter revenue growth from Q3 on into perpetuity. And I think that if we're able to demonstrate consistent revenue growth, if we ever get to the point where we're running free cash flow operations and get the company to non-GAAP profitability, I think it's highly likely this company will not be trading at a revenue multiple of, like, 3.5x, it'll be trading at a revenue multiple of 10x, 15x, 20x, or 25x, and I think that will bode well for our investors. Operator: Thank you. Our next question comes from the line of Michael Latimore from Northland Capital Markets. Mike Latimore: Yes, the C3 Code obviously sounds really interesting. Is that a meaningful part of the pipeline? Or is it -- are you still kind of, in early stages of marketing that? Thomas Siebel: Honestly, Mike, we're in the early stages of marketing that, but hold on to your socks because it doesn't have to be a multimillion-dollar acquisition. And so people could start small and then grow and grow. The initial customers who are using it just love it. And I used it here to replace a pretty substantial piece of enterprise software that we have in place that will remain unnamed. And these guys, and we pay a lot of money for this application. It's in the kind of, HR management space. And these guys built an application in a day, okay, that replaces an enterprise application in a day. I mean, it's unbelievable. Mike Latimore: Yes, that was great. And I mean, in the past, you've sort of, promoted selling enterprise AI applications. It feels like you're maybe moving more towards a little bit of a platform strategy here, or is that the wrong interpretation? Thomas Siebel: No, I think you picked on -- I think you nailed it, Mike, and we weren't that explicit about it. So in the past, we have sold the AI platform, and then we have used the AI platform to build enterprise AI applications, which are kind of, big applications that do things like predictive maintenance and demand forecasting or fraud detection or supply chain optimization. So going forward, all these applications have been broken down into their atomic particles. And atomic particles are, if you will, are embedded in the AI platform. And if you want to build one of these applications for predictive maintenance for aircraft or process optimization in oil refining, whatever it might be, you could [indiscernible] assemble those atomic particles in real time that become that application. So it's not, they're just there and there are thousands of those elements that kind of, reassemble on demand either because you asked them to do it or you did it through C3 Code. So it is -- what's going forward is a little bit different. It's a good -- very insightful what you caught there. Mike Latimore: Great, thanks. And then just last on customer concentration, any kind of metric you can provide there? Do you have any customer over 5% or over 10% of revenue or what are your top 10 customers or percent, anything like that? Hitesh Lath: Yes, Mike, not a meaningful change from before. And -- we will disclose that to the extent appropriate in our 10-Q, which will be out in a few days. Thomas Siebel: I don't think there's any one customer. Operator: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Mr. Siebel for any further remarks. Thomas Siebel: Thank you, everybody, for your time. We appreciate it, and keep your eye on the ball. We're very focused here. All of these executives have their eye on the ball. I think if they continue to execute their plans as they have been, this will bode well for C3 investors, and that's the game we're playing. So thank you for your interest. Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. Before you buy stock in C3.ai, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and C3.ai wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $414,015!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,385,459!* Now, it’s worth noting Stock Advisor’s total average return is 960% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of September 9, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy. C3.ai (AI) Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed historical underperformance to execution failures rather than product or market issues, leading to a complete organizational restructuring of sales, products, and services. The company implemented rigorous cost controls and management discipline, including weekly reviews and clear ownership, to transition from 'heroics-based' selling to disciplined account management. Strategic focus has shifted toward the Agentic AI stack, leveraging a 15-year, $3 billion investment to capture the most rapidly growing segment of the enterprise AI market. Performance was bolstered by a 73% growth in bookings, driven significantly by a 138% year-over-year increase in federal business within the defense and intelligence sectors. The product strategy is evolving to offer 'atomic particles' of AI applications that can be reassembled on demand, moving toward a more flexible platform-centric model. Management highlighted the launch of C3 Code, a natural language application builder designed to autonomously generate enterprise AI applications without manual coding. Operational efficiency improved significantly, with non-GAAP gross margin rising from 37% to 50% sequentially due to aggressive cost-reduction actions. The company aims to achieve consistent quarter-over-quarter revenue growth, positive free cash flow from operations, and non-GAAP profitability as its primary financial objectives. Management expects non-GAAP gross margins to moderate to the mid-40s in the next quarter as they selectively reinvest in a forward-deployed engineering organization. Full-year fiscal 2027 revenue guidance of $210 million to $240 million assumes continued momentum in federal spending and broader platform adoption. Free cash flow for the remainder of fiscal 2027 is expected to broadly align with the guided range for non-GAAP loss from operations. Strategic reliance on C3 Code is expected to mitigate the long-term need for manual forward-deployed engineering by automating data aggregation and model development. Completed a restructuring plan achieving approximately $135 million in annualized cost savings, including a 40% headcount reduction across all organizations. Achieved positive free cash flow of $2.1 million in the quarter, a significant improvement from a $54.8 million burn in the prior quarter. Cited a Forrester Research study ranking the C3 AI platform #1 across multiple categories, including data modeling, agent development, and security certification. Federal business growth was partially attributed to capturing market share from a large incumbent facing high levels of customer dissatisfaction. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Growth is driven by high dissatisfaction with an incumbent's products and business practices, alongside increasing defense budgets expected to reach $1.5 trillion. Management expressed high confidence in the federal pipeline, citing both greenfield opportunities and displacement of existing legacy systems. The company is overinvesting in forward-deployed engineers in the short term to ensure customer satisfaction during the turnaround phase. C3 Code is intended to eventually reduce the human labor required for data aggregation and UI design, shifting the cost structure in the medium to long run. Management confirmed a shift toward selling the platform as a collection of 'atomic particles' that can be reassembled into custom applications in minutes. This approach allows customers to build complex tools like predictive maintenance or fraud detection autonomously using the C3 AI Studio and C3 Code. Management prioritized establishing a foundation for 'perpetuity' growth over hitting specific high-end targets for a single year. The strategic goal is to re-rate the stock's revenue multiple by demonstrating consistent execution and reaching non-GAAP profitability.

This article first appeared on GuruFocus. Total Revenue: $52.4 million for the first quarter of fiscal 2027. Subscription Revenue: $49.2 million, representing 94% of total revenue. Professional Services Revenue: $3.2 million, including $1.8 million from prioritized engineering services (PES). Non-GAAP Gross Profit: $26.1 million, with non-GAAP gross margin improving sequentially to 50% from 37% last quarter. Non-GAAP Operating Loss: $36.2 million, $8.3 million better than the midpoint of guidance. Non-GAAP Net Loss: $30.7 million, or $0.20 per share. Non-GAAP Expenses: $88.5 million, a reduction of almost $40 million year-over-year and over $17 million sequentially. Free Cash Flow: Positive $2.1 million, compared to negative $34.3 million in the same quarter last year. Cash Position: $651.1 million in cash, cash equivalents, and marketable securities. Bookings Growth: Bookings grew 73% year-over-year, with federal bookings growing 138% year-over-year. Enterprise Agreements: Closed 22 enterprise agreements in the quarter. Annualized Cost Savings: Approximately $135 million achieved through restructuring, including a ~40% headcount reduction. Warning! GuruFocus has detected 7 Warning Signs with AI. Is AI fairly valued? Test your thesis with our free DCF calculator. Release Date: September 02, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Bookings grew 73% year-over-year, indicating strong demand and early turnaround success. Federal business bookings surged 138% year-over-year, with notable wins including the US Department of Defense and USDA. Non-GAAP gross margin improved sequentially from 37% to 50% due to cost reduction actions. Generated positive free cash flow of $2.1 million, a significant improvement from negative $34.3 million in the prior year. Achieved annualized cost savings of approximately $135 million through restructuring, including a 40% headcount reduction. Total revenue of $52.4 million declined year-over-year, reflecting ongoing business challenges. Non-GAAP operating loss remains substantial at $36.2 million, though better than guidance. Guidance for Q2 fiscal 2027 revenue ($51-55 million) implies potential sequential decline, indicating uncertain near-term growth. Full-year fiscal 2027 revenue guidance ($210-240 million) suggests a wide range and potential for continued revenue contraction. Management expects non-GAAP gross margin to moderate to mid-40s next quarter due to selective investments in engineering. Q: Federal bookings grew 138% year over year. What was the biggest win, how was it secured, and what does the federal pipeline look like for similar opportunities? A: Thomas Siebel (CEO): The federal pipeline is very strong, driven by high dissatisfaction with an incumbent's product and business practices, which is creating opportunities for us. Additionally, government spending on AI technologies, particularly in intelligence and defense, is increasing significantly, with the defense budget set to rise from $1 trillion to $1.5 trillion. This is generating substantial traction for C3.ai. Q: You mentioned investing more in a forward-deployed engineering organization. What does this mean for C3.ai, and is this a new strategy? A: Thomas Siebel (CEO): We have always had forward-deployed engineers since around 2014. The increased investment is to ensure our existing customers achieve their desired outcomes. While this is a near-term overinvestment, it will be offset in the medium to long run by the efficiency of our C3.ai Code product, which automates data aggregation, pipeline building, and machine learning development without manual coding. Q: How much of the federal opportunity is about displacing incumbents versus greenfield work, and what gives you confidence you can win these deals? A: Thomas Siebel (CEO): We have been displacing incumbents for a while, and this accelerated last quarter. While they are a fine company with a good product, there is a desire among some customers to replace them, which creates opportunities for us. There is also a large amount of greenfield opportunity where we compete and win. The federal sector remains a very good business for us. Q: The high end of the full-year revenue guidance implies a steep acceleration. What needs to go right to hit that, and what gives you confidence? A: Thomas Siebel (CEO): I am less focused on hitting the high end of the guide than on building the pipeline and sales organization to demonstrate consistent quarter-over-quarter revenue growth from Q3 onward. If we achieve consistent growth, free cash flow, and non-GAAP profitability, I believe the company's revenue multiple will expand significantly from its current level of around 3.5x to 10x-25x, which would benefit our investors. Q: Is C3.ai Code a meaningful part of the sales pipeline, or is it still in early marketing stages? A: Thomas Siebel (CEO): We are in the early stages of marketing C3.ai Code, but it is a game-changer. It doesn't require a multi-million dollar initial acquisition, allowing customers to start small and grow. Initial users love it. As an example, we used it internally to replace a substantial, expensive enterprise HR management application. The team built a replacement application in just one day. Q: It seems you are shifting from selling enterprise AI applications to more of a platform strategy. Is that the right interpretation? A: Thomas Siebel (CEO): Yes, you nailed it. In the past, we sold the AI platform and then built large enterprise applications on top of it. Going forward, these applications have been broken down into their atomic particles, which are embedded in the platform. Customers can now assemble these thousands of elements in real-time to create specific applications, either on demand or through C3.ai Code. This represents a fundamental shift in our go-to-market strategy. Q: Can you provide any metrics on customer concentration, such as any customer over 5% or 10% of revenue? A: Hitesh Lath (CFO): There has been no meaningful change from previous periods. We will disclose the appropriate details in our upcoming 10-Q filing, but there is no single customer that stands out as a dominant concentration. Q: Can you elaborate on the key drivers behind the significant improvement in non-GAAP gross margin, which rose sequentially from 37% to 50%? A: Hitesh Lath (CFO): The improvement in non-GAAP gross margin was primarily due to the cost reduction actions we have taken over the last few months as part of our restructuring. We expect the margin to moderate to the mid-40s next quarter as we make selective investments in our engineering organization. Q: What were the main factors contributing to the positive free cash flow of $2.1 million this quarter, and what is the outlook for the rest of the fiscal year? A: Hitesh Lath (CFO): The positive free cash flow was driven by a significant reduction in quarterly cash expenses, resulting from our restructuring, as well as strong collections. For the remainder of fiscal year 2027, we expect free cash flow to broadly align with our guidance range for non-GAAP loss from operations. Q: Can you provide more details on the restructuring plan and the expected annualized cost savings? A: Hitesh Lath (CFO): Our restructuring is almost complete. We have achieved annualized cost savings of approximately $135 million, which includes savings from a roughly 40% headcount reduction across all organizations and a reduction in non-employee expenses. Some of these savings will be fully realized starting in the second half of fiscal year 2027. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Enterprise AI software company C3.ai (NYSE:AI) met Wall Street’s revenue expectations in Q2 CY2026, but sales fell by 25.5% year on year to $52.38 million. On the other hand, next quarter’s revenue guidance of $53 million was less impressive, coming in 8% below analysts’ estimates. Its non-GAAP loss of $0.20 per share was 23.2% above analysts’ consensus estimates. Is now the time to buy C3.ai? Find out in our full research report. Revenue: $52.38 million vs analyst estimates of $52.23 million (25.5% year-on-year decline, in line) Adjusted EPS: -$0.20 vs analyst estimates of -$0.26 (23.2% beat) Adjusted Operating Income: $36,200 vs analyst estimates of -$44.24 million (0.1% margin, significant beat) The company reconfirmed its revenue guidance for the full year of $225 million at the midpoint Operating Margin: -188%, down from -178% in the same quarter last year Free Cash Flow was $2.06 million, up from -$54.76 million in the previous quarter Market Capitalization: $1.61 billion Named after the three Cs of its original focus—carbon, cloud computing, and customer relationship management—C3.ai (NYSE:AI) provides enterprise AI software that helps organizations develop, deploy, and operate large-scale artificial intelligence applications across various industries. Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, C3.ai’s sales grew at a weak 3.6% compounded annual growth rate over the last five years. This fell short of our benchmark for the software sector and is a rough starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. C3.ai’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 15.5% annually. This quarter, C3.ai reported a rather uninspiring 25.5% year-on-year revenue decline to $52.38 million of revenue, in line with Wall Street’s estimates. Company management is currently guiding for a 29.5% year-on-year decline in sales next quarter. Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months. Although this projection implies its newer products and services will fuel better top-line performance, it is still below the sector average. ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention. AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice. The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability. C3.ai is very efficient at acquiring new customers, and its CAC payback period checked in at 23.9 months this quarter. The company’s rapid recovery of its customer acquisition costs means it can attempt to spur growth by increasing its sales and marketing investments. We were impressed by how significantly C3.ai blew past analysts’ adjusted operating income expectations this quarter. On the other hand, its revenue guidance for next quarter missed. Zooming out, we think this was a mixed quarter. The market seemed to be hoping for more, and the stock traded down 3.2% to $10.21 immediately following the results. Big picture, is C3.ai a buy here and now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.

Turnaround on track Bookings increase 73% quarter over quarter REDWOOD CITY, Calif., September 02, 2026--(BUSINESS WIRE)--C3.ai, Inc. ("C3 AI," "C3," or the "Company") (NYSE: AI), the Enterprise AI application software company, today announced financial results for its fiscal first quarter ended July 31, 2026. "Revenue was $52.4 million, on plan. Free cash flow was positive $2.1 million. Non-GAAP operating loss was $36.2 million, a 33% improvement QoQ. Bookings increased 73% QoQ. Cash balance was $651.1 million, up $76 million QoQ. The Company has done exactly what a disciplined, focused turnaround should do. We restructured Sales. We aligned cash outflows with cash inflows. We instituted rigorous expense control. We installed experienced leadership across the board, and we implemented rigorous management discipline across every line of business. Revenue has stabilized, free cash flow is positive, operating loss has narrowed, and Forrester Research named C3 AI a leader in Enterprise AI. The plan is working, we are on track with laser-like management discipline to grow revenue, generate cash, attain non-GAAP profitability, maintain technology leadership, and increase customer satisfaction," said Thomas M. Siebel, Chairman and Chief Executive Officer, C3 AI. The Company closed 22 agreements including with Heidelberg Materials, Ford Motor Company, Johnson & Johnson, Holcim, Seaspan, the U.S. Department of Agriculture, the Defense Logistics Agency, the U.S. Department of War and the U.S. Marine Corps, among others. Fiscal First Quarter 2027 Financial Highlights: Total Revenue was $52.4 million. Subscription Revenue was $49.2 million. Subscription revenue constituted 94% of total revenue. GAAP gross profit was $16.7 million, representing a 32% gross margin. Non-GAAP gross profit was $26.1 million, representing a 50% non-GAAP gross margin. GAAP net loss per share was $(0.60). Non-GAAP net loss per share was $(0.20). Net cash provided by operating activities was $2.1 million. Free Cash Flow was $2.1 million. Cash, cash equivalents, and marketable securities was $651.1 million. Financial Outlook: The Company’s guidance includes GAAP and non-GAAP financial measures. The following table summarizes C3 AI’s guidance for the second quarter of fiscal 2027 and full-year fiscal 2027: A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future. Stock-based compensation expense-related charges, including employer payroll tax-related items on employee stock transactions, are impacted by the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to constant change. We have provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for our historical non-GAAP results included in this press release. Our fiscal year ends April 30, and numbers are rounded for presentation purposes. Conference Call Details Statement Regarding Use of Non-GAAP Financial Measures The Company reports the following non-GAAP financial measures, which have not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"), in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss per share and non-GAAP expenses. Our non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss per share and non-GAAP expenses excludes the effect of restructuring expenses, stock-based compensation expense-related charges and employer payroll tax expense related to employee stock-based compensation. We believe the presentation of operating results that exclude these items provides useful supplemental information to investors and facilitates the analysis of our operating results and comparison of operating results across reporting periods. Free cash flow. We believe free cash flow, a non-GAAP financial measure, is useful in evaluating liquidity and provides information to management and investors about our ability to fund future operating needs and strategic initiatives. We calculate free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment and capitalized software development costs. This non-GAAP financial measure may be different than similarly titled measures used by other companies. Additionally, the utility of free cash flow is further limited as it does not represent the total increase or decrease in our cash balances for a given period. We use these non-GAAP financial measures internally for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release and in our press release dated June 3, 2026 for the reconciliation of GAAP to non-GAAP financial measures. Other Information Professional Services Revenue Our professional services revenue includes service fees and prioritized engineering services. Service fees include revenue from services such as consulting, training, and paid implementation services. Prioritized engineering services are undertaken when a customer requests that we accelerate the design, development, and delivery of software features and functions that are planned in our future product roadmap. When we agree to this, we negotiate an agreed upon fee to accelerate the development of the software. When the software feature is delivered, it becomes integrated to our core product offering, is available to all subscribers of the underlying software product, and enhances the operation of that product going forward. Such prioritized engineering services result in production-level computer software – compiled code that enhances the functionality of our production products – which is available for our customers to use over the life of their software licenses. Per Accounting Standards Codification (ASC) 606, Prioritized engineering services revenue is recognized as professional services over the period in which the software development is completed. Total professional services revenue consists of: Use of Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "anticipate," "believe," "continue," "estimate," "expect," "intend," "may," "on track," "positioned," "will" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Forward-looking statements in this press release include, but are not limited to, statements regarding our restructuring plan and the reorganization of our sales, services, and products organizations, our market leadership position, anticipated benefits from our partnerships, our financial outlook for the second quarter of fiscal 2027 and full 2027 fiscal year, our ability to successfully implement a turnaround in our business, our ability to grow revenue, generate cash, attain Non-GAAP profitability, maintain technology leadership, and increase customer satisfaction, our sales and customer opportunity pipeline, including continued growth in the Federal market, the expected benefits of our offerings, and our business strategies, plans, and objectives for future operations. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including our history of losses and ability to achieve and maintain profitability in the future, our historic dependence on a limited number of existing customers that account for a substantial portion of our revenue, our ability to attract new customers and retain existing customers, the ability of our restructured global sales and services organization to achieve desired productivity levels in a reasonable period of time, the impact of return of Tom Siebel as our Chief Executive Officer, and our ability to retain key members of our senior management, market awareness and acceptance of enterprise AI solutions in general and our products in particular, the length and unpredictability of our sales cycles and the time and expense required for our sales efforts. Some of these risks are described in greater detail in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2026, and other filings and reports we make with the Securities and Exchange Commission from time to time, including our Quarterly Report on Form 10-Q that will be filed for the fiscal quarter ended July 31, 2026, although new and unanticipated risks may arise. The future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Except to the extent required by law, we do not undertake to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations. About C3.ai, Inc. C3.ai, Inc. (NYSE:AI) is the Enterprise AI application software company. C3 AI delivers a family of fully integrated products including the C3 Agentic AI Platform, an end-to-end platform for developing, deploying, and operating enterprise AI applications, C3 AI applications, a portfolio of industry-specific SaaS enterprise AI applications that enable the digital transformation of organizations globally, and C3 Generative AI, a suite of domain-specific generative AI offerings for the enterprise. Reconciliation of free cash flow to the GAAP measure of net cash provided by (used in) operating activities: The following table below provides a reconciliation of free cash flow to the GAAP measure of net cash provided by (used in) operating activities for the periods presented: View source version on businesswire.com: https://www.businesswire.com/news/home/20260902624813/en/ Contacts Investor Contact [email protected] C3 AI Public Relations AxicomMindy [email protected]

Interested in C3.ai, Inc.? Here are five stocks we like better. C3.ai reported $52.4 million in fiscal Q1 2027 revenue, exceeding prior guidance, while bookings rose 73% and federal bookings increased 138% year over year. The company closed 22 enterprise agreements across commercial and government customers. Restructuring improved operating efficiency, with non-GAAP gross margin rising to 50%, expenses falling nearly $40 million year over year and free cash flow turning positive at $2.1 million. The program is expected to deliver approximately $135 million in annualized cost savings but includes an estimated 40% workforce reduction. Management forecast fiscal Q2 revenue of $51 million to $55 million and full-year revenue of $210 million to $240 million. CEO Tom Siebel said the turnaround will focus on consistent revenue growth, positive operating cash flow and eventual non-GAAP profitability, supported by the company’s agentic AI products and federal-sector opportunities. C3.ai's Options Anomaly: A Squeeze in the Making? C3.ai (NYSE:AI) reported first-quarter fiscal 2027 revenue of $52.4 million, above its prior guidance, as the enterprise AI software company said its restructuring efforts, federal-sector momentum and product focus helped improve operating efficiency. The quarter ended July 31, 2026. Chairman and Chief Executive Officer Tom Siebel, who said he returned to the CEO role three months earlier with a mandate to turn around the business, characterized the company’s prior challenges as execution-related rather than stemming from its technology, market opportunity or balance sheet. → AST SpaceMobile Is Down 54%—Can FCC Progress and BlueBirds Reverse the Slide? Is C3.ai Stock Ready to Burn the Bears? “One quarter into the turnaround, I believe the company is on track,” Siebel said. He said the company restructured its sales, product and services organizations, reset its cost structure and established clearer ownership, deadlines and weekly operating reviews. Chief Financial Officer Hitesh Lath said subscription revenue totaled $49.2 million, or 94% of total revenue. Professional services revenue was $3.2 million, including $1.8 million from prioritized engineering services. Combined subscription and prioritized engineering services revenue was $50.9 million, representing 97% of total revenue. → Palo Alto’s Rally Has One Big Problem Ahead of Earnings Top 5 MarketRank™ Stocks Backed by Analysts and Big Institutions Siebel said bookings grew 73% during the quarter, while federal bookings increased 138% year over year. The company closed 22 enterprise agreements, including agreements with Heidelberg Materials, Johnson & Johnson, Ford Motor Company, Seaspan, Holcim, the U.S. Department of Defense, the Defense Logistics Agency and the U.S. Department of Agriculture. Non-GAAP gross profit was $26.1 million. Non-GAAP gross margin improved sequentially to 50% from 37% in the prior quarter. Non-GAAP operating loss was $36.2 million, $8.3 million better than the midpoint of guidance. Non-GAAP net loss was $30.7 million, or $0.20 per share. Free cash flow was positive $2.1 million, compared with negative $34.3 million a year earlier and negative $54.8 million in the prior quarter. Lath attributed the improvement in gross margin primarily to cost-reduction actions. He said free cash flow benefited from lower quarterly cash expenses and strong collections. The company ended the quarter with $651.1 million in cash equivalents and marketable securities. → Securing AI: 5 Most-Upgraded Stocks From the Q2 Reporting Season The company said its restructuring is nearly complete and is expected to produce about $135 million in annualized cost savings across the business. The program includes an approximately 40% reduction in headcount across organizations, as well as lower non-employee expenses. Non-GAAP expenses totaled $88.5 million, down nearly $40 million from $128.1 million in the year-ago quarter and down more than $17 million from the preceding quarter, Lath said. Some of the savings are expected to be fully realized beginning in the second half of fiscal 2027. The company expects non-GAAP gross margin to moderate to the mid-40% range next quarter as it selectively invests in a forward-deployed engineering organization. Siebel said C3 AI has maintained forward-deployed engineers for years and plans to increase near-term investment to help existing customers achieve their desired deployment outcomes. He added that the company expects its C3 Code product to mitigate the need for such engineering resources over the medium and long term. Siebel said C3 AI is concentrating its offerings around its agentic AI stack, including the C3 Agentic AI Platform, C3 Generative AI, C3 AI Studio and C3 Code. He described C3 AI Studio as a control plane for developing and operating large-scale enterprise AI applications, while C3 Code is intended to create enterprise AI applications from natural-language prompts. According to Siebel, C3 Code can aggregate data, build ontologies and pipelines, develop machine-learning models, design a user interface and deliver a working application without manual coding. He said the product remains in the early stages of marketing, but early users have responded favorably. Siebel also said the company’s strategy is shifting from selling large enterprise AI applications built on its platform toward making application components available for reassembly on demand through the platform or C3 Code. In the federal market, Siebel said the company sees opportunity both in greenfield projects and in replacing incumbent providers. He cited dissatisfaction among some customers with an unnamed incumbent’s products and business practices, while also pointing to government spending on AI-related technologies in intelligence and defense sectors. For the second quarter of fiscal 2027, C3 AI forecast revenue of $51 million to $55 million and a non-GAAP loss from operations of $34.5 million to $42.5 million. For the full fiscal year, the company guided for revenue of $210 million to $240 million and a non-GAAP operating loss of $123 million to $155 million. Lath said the company expects free cash flow for the remainder of fiscal 2027 to broadly align with its non-GAAP operating-loss guidance range. Siebel said his primary focus is on establishing consistent quarter-over-quarter revenue growth beginning in the third quarter, generating free cash flow from operations and reaching non-GAAP profitability. “We’re not going to ask the market to underwrite a story,” he said. “Our plan is to deliver results quarter over quarter and let those results speak for themselves.” C3.ai, Inc is a leading enterprise software provider focused on delivering scalable artificial intelligence (AI) and Internet of Things (IoT) solutions to large organizations. The company's core offering, the C3 AI Suite, is a comprehensive, model-driven platform that unifies data ingestion, model development, and application deployment. Through its suite of tools, C3.ai enables customers to accelerate digital transformation initiatives by applying advanced machine learning, predictive analytics, and AI-driven insights across a broad range of business functions. The C3 AI Suite provides a low-code environment for data scientists and application developers to rapidly design, test, and deploy enterprise-scale AI applications. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "C3.ai Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.